Be prepared with your payroll records!

As a professional bookkeeper, I am warning all of my clients that you MUST be prepared with your payroll records! Look ahead…..and be prepared for a new wave of wage-hour and IRS audits. The Dept of Labor (DOL) is making a major push on wage-hour enforcement audits.

Even if your business has never violated an IRS or DOL rule, substantial penalties may apply for simply not maintaining the required records. Now is the time to gather up the records you are required to keep under federal law. Records may be stored at company offices; for multiple locations, in a central office. This applies to S-Corps too…….one of the requirements of the S-Corp is officer payroll. So even if the only employee on the payroll is the owner, you must keep the same documentation!

The IRS requires employers to keep for at least 4 years the following:

NOTE: Because the 4 year period begins at different times, I recommend you keep all of the above for 5 years. The DOL or IRS requires that you keep all of this data. However, you don’t have to keep it in hard copy form, as long as it is available to print should that be requested by the auditor.
Keep for at least 3 years:

Collective bargaining agreements

Employees sex and occupation

Time and day of week employees workweek begins

Hours worked each day and each workweek

Total daily or weekly straight-time/overtime earnings

All additions to/deductions from employees wages

Total wages paid each pay period

Date of payment and the pay period covered by it

Keep for at least 2 years documents that support calculations for:

Work tickets

Piece work tickets

Wage rate tables., work and time schedules

Additions to or deductions from wages

Time cards

Keep indefinitely:

Name, address and TIN of each vendor/non-employee payments

Payment dates

Completed W9’s

Payer 1099-MISC and other information return copies

945’s

Purpose of payments

Contracts for independent contractors

Any notices related to backup withholding

Looking for a GREAT Denver bookkeeping company to help with all of this? Give me a call today and let’s talk about how to work together!